Candy: New twists on classics sweeten sales

By Barbara White-Sax

New twists on classic candy brands helped propel dollar sales in the chocolate candy segment ahead nearly 10%. An increase in prices contributed to the dollar sales gain, but a big boost came from line extensions and limited-edition flavors.

“The old standbys are comfort brands for consumers, and manufacturers continue to trade off their following with new products,” said Lisbeth Echeandia, VP trade marketing of consulting firm Frey Enterprises.

Jack Russo, an analyst with Edward Jones, said line extensions were a low-risk, high-reward approach for the companies.

M&M Mars has been bullish on extending its brand franchise. “Offering new products invigorates the category,” said Lauren Nodzak, a spokeswoman for Mars Chocolate North America. “Consumers trust brands they love, so they’re open to trying new flavor variations.”

With 6-of-the-top-15 chocolate brands, Mars has plenty of room for variation. After introducing
M&M coconut chocolate candies as a limited-edition release in summer 2009, Mars made the extension permanent at the end of the year. In May, the company introduced M&M’s pretzel chocolate candies. The product was ranked by Forbes as the No. 3 most-memorable product launch of the year, and scored the brand a place on Advertising Age’s list of America’s Hottest
Brands for 2010.

Other introductions were Dove sugar-free chocolates with peanut butter crème, Snickers peanut butter Squared and Dove brand chocolate swirl in two flavors. Twix coconut cookie bar will launch in April as a limited-edition product.

Rival Hershey also has carefully added its own brand extensions — notably Reese’s minis and Hershey’s drops, as well as Pieces versions of its York, Almond Joy and Special Dark brand. Hershey has scaled back on limited-edition candies after retailer resistance to too many extensions several years ago caused the company to refocus its strategy.

The article above is part of the DSN Category Review Series. For the complete Candy Buy-In Report, including extensive charts, data and more analysis, click here.